FutureFocus January 10, 2018 ACO Savings Not Related To Reduced Hospitalizations

Lisa Remington

In this week’s FutureFocus, we look at an interesting fact about MSSP ACOs and the relationship to hospitalizations. A Harvard study finds ACO preventable hospital admissions didn't decrease, but instead rose. In another article, we look at readmission penalties. Since the onset of the Readmission Reduction Program (HRRP), penalties have continued to rise. The analysis compares FY 2013-2017. In our Washington Report, we examine the Medicare Extenders Package and the impact to post-acute providers.

Lisa Remington, President, Remington Health Strategy Group

On the agenda for Congress in its second session--unfinished business from 2017--is passage of legislation popularly known as the Medicare Extenders Package, affecting policies that expire unless Congress acts. Most were last extended in the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015. Congress failed to act at the end of 2017, mainly because enacting tax reform legislation became its overriding priority.

 At the end of last year, bipartisan agreements were in the final stages in two key committees in the House and Senate. In the House, the Ways and Means Committee reached an agreement on its extender package. For post-acute care, the package includes a five-year straight extension of the home health rural add-on. Also, it includes a permanent extension of the exceptions process with a repeal of the outpatient therapy caps. Six other extenders are included, all of which Congress will seek to address with “Medicare Policy Offsets,” according to Ways and Means. Among these, “modifications to home health agency payment, including MedPAC [Medicare Payment Advisory Commission] recommendations and building blocks to payment reform.” Skilled Nursing Facilities also are singled out for “payment reform.” Details were not provided.

“Potential Cut in Range of $3-6 Billion,” NAHC

Congress will thus be looking for ways for Medicare to pay for the extenders, naturally spurring stakeholder groups to action. The National Association for Home Care & Hospice (NAHC) has been urging its members to write their lawmakers “to protect home health in the Medicare Extenders Package,” warning last month of a “potential cut in payment rates and spending on home health services likely to be in the range of $3-6 billion over the next 10 years.”

The phase out of the rural add-on was included in the Senate Finance Committee’s “discussion draft” of its extenders package. Both Finance and Ways and Means remain to send final legislation to their respective chambers, giving provider groups a window to press for changes.

"In a release, NAHC adds, “What’s more, lawmakers are considering phasing out the rural add-on over the next three to five years.”

One possible change, NAHC urges, Congress could graft onto the extenders package legislation sponsored last February by Sens. Susan Collins (R-ME) and Maria Cantwell (D-WA) “Preserve Access to Medicare Rural Home Health Services Act of 2017” (S353), extending the program for five years at current levels with an offset to pay for the cost. “Medicare home health payment rates or spending should not be cut beyond what is absolutely necessary and especially not beyond what is needed to fund the rural add-on.”

In addition to full extension of the rural add-on at current levels, Congress should “allow stakeholders to continue to work with CMS to reform the payment structure,” NAHC adds. “Legislative action is not necessary at this point.” The potential reduction in “the range of $3-6 billion over the next 10 years…are disproportionate to what other sectors are facing. The projected savings will not be redistributed within home health, but rather distributed to fund other Medicare programs.”

By: Ronald M. Schwartz, Writer, The Remington Report